LVMH swoops on Belmond’s luxury portfolio

French luxury conglomerate LVMH has agreed to acquire high-end hospitality group Belmond for US$3.2 billion. The deal is expected to close by the first half of 2019.

Belmond’s portfolio spans 46 hotels, restaurants, trains and river cruise ships across 24 countries. Among the group’s more famous holdings are the Belmond Hotel Cipriani in Venice and the Belmond Copacabana Palace in Rio de Janeiro, as well as the 21 Club restaurant in New York and Venice Simplon-Orient-Express train service in Europe.

LVMH’s sprawling stable includes the Christian Dior and Louis Vuitton fashion brands, as well as wine and spirits business Moet Hennessy, among many other subsidiaries.

Belmond will mark the Paris-based company’s second play in the hospitality space, joining LVMH’s boutique hotel brand Cheval Blanc, launched in 2006. By comparison, however, the Cheval Blanc footprint is modest, with just three existing outposts in Courchevel, France, the Maldives and Saint-Barthelemy, and two additional locations slated to open in St-Tropez and Paris.

“The future of luxury will not only be in luxury goods, as it’s been for many years, but also in luxury experiences, and we want to be in both segments,” said LVMH chairman and CEO Bernard Arnault during a conference call with investors, adding that he saw no reason that the Belmond name could not be made “as recognizable as any other brand” in the LVMH stable.

Meanwhile, Arnault emphasised that Belmond’s sizeable collection of owned real estate was a primary draw for LVMH, and that there were no plans to sell off any assets.

“In our view, the fact that Belmond owns an extremely large share of their portfolio, and an unusually large share compared to peers, is a strong competitive advantage,” Arnault added.

“In other segments of hospitality, the distinction between operations and real estate makes much more sense, but as far as luxury hospitality – and especially ultra-luxury hospitality – is concerned, I think aligning the real estate and operations is extremely important. So that will not change.”